Man in the News: Anthony O’Reilly

Sir Anthony O’Reilly tells a story that when he acquired Waterford Wedgwood in 1990 he took the company’s Irish trade union representatives to New York so they could eavesdrop on US shoppers.

The former Irish and British Lions rugby star, who had established himself as Ireland’s best known businessman, was keen to demonstrate that US consumers were buying a brand, not an Irish-made product. His subliminal message was that Waterford stemwear could be made anywhere in the world without affecting its consumer appeal.

On the face of it, it seems he failed to heed his own lesson, with receivers this week ap­pointed at the luxury goods company and his resignation as chairman. Most experts blame the high Irish cost-base for crippling Waterford Wedgwood.

Whether it was blind faith in his own ability, or as one senior stockbroker put it “a misplaced nationalism”, the debacle is a severe blow. According to a New York friend, the failure is “the lowest point in his career”, which had ranged from becoming chief executive and chairman of HJ Heinz after 30 years at the food company, to acclaim on the rugby field, where he still holds the record for tries scored on a British Lions tour.

People close to him say his near 20-year association with Waterford Wedgwood – indeed, the role he has played in all his Irish companies, his support for Irish theatre and opera and extensive charity work – has been driven by more than commercial or personal gain. Unlike many Irish business people of his generation who made fortunes abroad, he put money back into Irish companies.

“If you cut him open, his blood runs green. He’s an Irishman before anything. And perhaps that goes some way to explain his commitment to Waterford Wedgwood,” says David Palmer, a former board colleague at Independent News & Media, where Sir Anthony is chief executive.

But it is not just his business reputation that has taken a battering. He and Peter Goulandris, his brother-in-law, are set to lose €400m (€539m, £354m) – the amount they are estimated to have spent subscribing to a series of rights issues to keep it afloat. They have also given personal guarantees on part of the €449m net debt. But as Tony O’Reilly junior, his 42-year-old son (one of six children from his first marriage to Susan Cameron, an Australian pianist), once said of a different investment: “My father has always followed his money.”

Sir Anthony was born in Dublin in 1936, son of a middle-ranking civil servant who had already had a family of four with a previous wife. It was a middle-class upbringing, attending Belvedere College from the age of six, before eventually studying law at University College, Dublin. But it was sport that defined his early career. At 18 he made his senior international rugby debut for Ireland, playing until 1969. His last appearance in the green jersey came after selectors tracked him down at Annabel’s, his favourite London nightclub. The following day he arrived for training in a chauffeur-driven Bentley.

That year he flirted briefly with the idea of a political career after being approached to stand for the Irish parliament for the conservative Fine Gael party, but declined. Garret FitzGerald, a former prime minister, always felt he had the gifts for a brilliant political career. Instead, aged 26, he joined Bord Bainne, the Irish milk marketing board, where he pulled off his first conjuring trick, creating Kerrygold, an Irish butter product named after a county where, he relished reminding audiences, there is little butter production.

Since then, his business ventures have included supermarkets, mines and offshore oil drilling. Forbes last March ranked him the world’s 677th richest man. He has enjoyed his wealth, building up an impressive art collection, including a Monet; multiple residences, including one in Nassau; and an Irish stud farm. After divorcing his first wife, he married Chryss Goulandris, a shipping heiress who breeds and races thoroughbred horses.

He joined Heinz in 1970, running the UK operation, and later became the first non-family member to be chief executive, then chairman. He was once asked how he found time for his Irish investments while serving as boss of one of the world’s largest food companies. “I don’t play golf,” he quipped. One Heinz shareholder once complained the company was “in the hands of a man with nine jobs”.

Running a growing Irish business empire at arm’s length while working at Heinz created strains. He tended to choose managers more for their loyalty than competence. This is the central thrust of charges levelled by Denis O’Brien, the Irish telecommunications entrepreneur who owns close to 28 per cent of IN&M, publisher of The Independent – the lossmaking London title. Since acquiring the media business in 1973, Sir Anthony now owns 29 per cent of IN&M. He has defended The Independent, bought in 1998, as his “calling card”. Both men have sustained huge paper losses on their stakes. A year ago Sir Anthony’s stake was worth €567m; now it is just €119m. In the past couple of months there appears to have been an uneasy truce between them. Mr O’Brien, called a “dissident shareholder” by Sir Anthony a few months ago, was spotted before Christmas taking a tour of the Dublin print works.

Throughout his varied career, he has never forsaken his Irish roots. Even when running Heinz, he returned to Ireland each summer. His charity work has focused on Ireland. In 1976 he set up the Ireland Fund to thwart US fundraising efforts of the IRA. The charity is the second largest US philanthropic organisation after the United Jewish Appeal. Sir Anthony famously urged fundraisers to “dress British, look Irish and think Yiddish”.

A cold-eyed analysis of the performance of most of his Irish investment hunches, however, shows that few have delivered big returns. Arcon, a Tipperary zinc mine sold to Lundin, the Canadian resources group, was a huge drain on his finances. He spent an estimated €100m over 20 years exploring for oil off Ireland’s coastline. Even so, few Irish would begrudge his achievements and his record has been an inspiration for many in Ireland.

News that Waterford Wedgwood’s receivers may find a US buyer will be some comfort to the 8,000 workers, but is a week too late for Sir Anthony. It may get worse for him. This weekend he is preparing for IN&M’s annual gathering of regional managers. Recalling his son’s words: there may soon be less money for his father to follow.